If the U.S. really wants to stanch illegal immigration from Central America, it should finally start addressing the root of the problem.
- By Robert LooneyRobert Looney teaches economics at the Naval Postgraduate School in Monterey, California.
United States policy in Central America faces unaccustomed scrutiny. In his State of the Union speech in January, President Obama cited the region as a prime source of instability. Shortly thereafter, the administration announced that it would implement a set of new policies aimed primarily at stemming the flood of refugees heading into the United States. Meanwhile, critics have assailed the White House for stepping up its deportation of illegal migrants, many of whom stem from the region.
What all of these policies have in common is that they target the symptoms of Central America’s refugee crisis while doing little to address its underlying causes. The U.S. has undertaken piecemeal efforts to remedy the problems that are fueling migration from the region, but it has done little to attack the most fundamental problem: a general crisis of governance, one whose most visible symptom is a flourishing culture of corruption.
The most vivid example of the destructive forces at work is offered by Honduras, in many respects the region’s most dysfunctional state. Those fleeing the country are responding most immediately to the rising levels of violence fueled by the rise of organized crime and powerful gangs. The country’s second city, San Pedro Sula, is now known as the “most violent city in the world.”
But that violence is merely the most obvious symptom of a deeper malaise. The explosive growth of the drug trade has resulted in a culture of corruption that reaches into the highest levels of society. Highly placed officials or other members of the entrenched elite are often involved. In early October 2015, U.S. officials charged three members of the country’s prominent Rosenthal family with using their bank, the Banco Continental S.A., to carry out an elaborate money laundering operation that involved drug dealers and funds stolen by public officials. The Rosenthal family’s extensive assets (including, rather bizarrely, a crocodile farm) account for roughly 5 percent of the country’s GDP. The family’s connections in the government are extensive, and include a bank president, a former government minister, and a close adviser to the country’s current president, Juan Orlando Hernández.
The latter’s 2013 election campaign was discovered to have siphoned off funds from the Honduran national health plan and old-age pension system, leaving, by some estimates, thousands of Hondurans dead due to shortages of medicine and equipment. Medical fraud is apparently a growth industry in Honduras. The vice president of parliament, Lena Gutierrez, was recently charged for alleged involvement in a scheme that sold poor quality medicine to the government at inflated prices. Her father and two of her brothers face similar allegations, though all insist that they had sold their stakes in the company long before any wrongdoing.
Over the summer of 2015, outrage over the all-too-obvious theft of public funds inspired nationwide protests. Parallel demonstrations in neighboring Guatemala prompted commentators to speak of an incipient “Central American Spring.” While the president did not resign, the demonstrations signaled that the people’s patience with overt corruption had reached its limits.
This should come as no surprise. Corruption is essentially an economic tax on Hondurans’ present standards of living and their future prospects. The World Economic Forum ranks Honduras 133rd out of 140 with respect to the business costs of crime and violence, and 134th in terms of organized crime. The World Bank estimates that violent crime costs Honduras up to 19.2 percent of its GDP each year. It is, of course, impossible to determine how much of this amount can be attributed directly to police corruption. At least one estimate suggests, however, that 40 percent of the country’s police officers are tied to organized crime.
And none of this even begins to account for the opportunity costs of corruption. To name but the most prominent example, Honduras could give its economy a major boost by joining the Trans-Pacific Partnership, the free trade pact recently concluded by a number of countries in the Asia-Pacific region. Honduras already has a number of free-trade zones where its workers assemble and process goods shipped to foreign markets. If all of Honduras were to join the agreement, however, it could expand such trade dramatically.
Unfortunately, the country’s reputation for corruption and violence mean that is has virtually no chance of admission. Citing the country’s appalling working conditions (including systematic persecution of labor leaders by the Honduran government), civil rights groups and labor organizations in the U.S. are certain to block Honduras’s application for accession to the bloc.
Corruption and criminality might seem like insurmountable problems, deeply embedded in cultural or historical structures. The reality, though, is that the modern world has now amassed considerable experience in fighting such ills. We know of many cases in which profoundly corrupt societies have succeeded in rolling back endemic corruption. And one of the most dramatic success stories comes from one of Honduras’s own neighbors.
Earlier this century, confronted with similar levels of pervasive corruption in his own country, Guatemalan president Berger brokered an agreement with the U.N. to install an independent, international anti-corruption commission, the International Commission against Impunity in Guatemala (CICIG). The creation of the commission in 2007 represented a tacit recognition of the extent to which criminal mafias and illegal intelligence rings have penetrated state institutions.
In its official statements, CICIG notes that it “acts as a third-party prosecutor that intervenes on behalf of victims, clarifies the extent to which illicit armed groups have infiltrated the state, and recommend policies in order to disband such groups.” Its actions bear this out. Since its creation, CICIG has directed a number of key investigations affecting prominent political figures, including former President Perez Molina and former Vice-President Roxana Baldetti. Baldetti resigned in May, and has since been arrested and imprisoned. Perez Molina resigned and was jailed in September.
Protesters in Honduras have advocated the establishment of an equivalent to CICIG in their country, but President Hernandez and leading members of the political establishment have resisted. Rather than creating an internal commission that would lack credibility with the public, or turning to the U.N. for a CICIG-type solution, the Honduran government asked for assistance from the Organization of American States. The resulting anti-corruption commission, the Mission to Support the Fight Against Corruption and Impunity in Honduras (MACCIH), was announced in September 2015 and became official on January 19 of this year.
It’s easy to see why Honduran elites prefer MACCIH to an equivalent body overseen by the United Nations. MACCIH is focused on strengthening the Honduran justice system, but has a very limited role in reviewing specific cases. Additionally, the role of international advisers in MACCIH is limited to consulting on investigations and advising Honduran authorities. In sharp contrast, CICIG is oriented toward supporting and strengthening institutions that investigate and prosecute crimes. Most importantly, CICIG has the authority and capacity to initiate its own investigations in which international lawyers and judges can take an active role. The CICIG model, in short, is far more intrusive (and, arguably, more effective as a result).
Many Hondurans have correspondingly expressed doubt that the government-sanctioned MACCIH will have the authority to make significant gains in the drive against corruption. They are right to be skeptical. Given its design, MACCIH is likely to operate mainly in an advisory capacity, with little or no mandate to actually pursue prosecutions. To activists, the fact that the Honduran government would sanction such an effort is proof the authorities are only trying placate the population and stave off the creation of a more stringent commission.
So is the situation in Honduras hopeless? Far from it. The United States and other like-minded countries can work with local groups to strengthen MACCIH. There are some logical places to start, such as assisting local groups in becoming effectively involved in its implementation.
But there is no simple formula to control and roll back corruption. Recently a number of success stories have been compiled from a broad spectrum of countries, including Uruguay, Estonia, Chile, Costa Rica, Taiwan, South Korea, and Georgia. These successes seem to have one thing in common: policymakers and activists created virtuous circles that enabled anti-corruption programs to effectively counter vested interests. While tailoring an anti-corruption policy to Honduran conditions will require careful analysis, drawing on some of the lessons from these countries is the best place to start.
In addition to eroding the country’s democratic institutions, corruption in Honduras has many hidden costs. Rather than spending billions only on improving border security, which leaves the source of the problem unaddressed, the United States (and other likeminded countries) should consider at least allocating some of the funds in its new programs to the fight against corruption in Honduras and the rest of Central America.
In the photo, thousands of demonstrators march toward the U.S. Embassy demanding the resignation of President Juan Orlando Hernandez, accused of corruption, in Tegucigalpa, Honduras on June 12, 2015.
Photo credit: ORLANDO SIERRA/AFP/Getty Images